Banks slash payments to index funds for Russell rebalance

With the annual rebalance of the Russell stock indexes just a day away, brokerage firms are shaving the discounts they typically offer to big index funds on what is usually one of the biggest trading days of the year. On Friday, Russell will announce the names of some 128 companies that it is adding to its widely-followed Russell 2000 index of small companies. As recently as three years ago, big brokerages such as Bank of America Merrill Lynch (BAC.N) and Goldman Sachs (GS.N) would vie for those orders, confident that they could hand the big fund companies discounts of around .05 percent off of market-priced trades and still make money, mainly by stockpiling the right stocks in advance of the big trade.

Banks slash payments to index funds for Russell rebalance source: http://finance.yahoo.com/news/banks-slash-payments-index-funds-051706971.html